Can You Contribute to Both a ROTH IRA and a ROTH 401k?

According to www.serenityfc.com, you can contribute to both a ROTH IRA and a ROTH 401k?  For 2013, the contribution limits for a ROTH IRA are $5,500 (for under age 50) and $17,500 for a ROTH 401k.

Which should you contribute to first if you have the option to do both?  Why would you contribute to one over the other?

In general, personal IRA accounts tend to have more control and lower fees.  For example, your account at work will often times have to be distributed immediately if something were to happen to you, while your personal IRA account can be stretched across generations.

So, if your work matches your ROTH 401k contribution, which shoud you contribute to first?  What do you do if you exceed the income limitations for a ROTH IRA?  You can read older posts and keep coming back to learn more.  Education is the key.

Did you know the number one cause of divorce is finances according to www.divorce.com.

This post was reposted from http://finlit.biz/retirement-2/can-you-contribute-to-both-a-roth-ira-and-a-roth-401k/, originally written on February 1st, 2013.

4 Questions to Ask if You are Thinking About Using a ROTH 401k

Should you contribute to a ROTH 401k at work?  If you do, which funds should you choose?  Do you like randomly picking investments at work?

At www.smartmoney.com, they have a great article that talks about the advantages of a ROTH 401k.  First of all, it allows you to shelter after tax dollars and have your money grow tax-free.

According to www.your-roth-ira.com, you can contribute $5,500 (or $6,500 for over 50) for 2013 unless you make more that $112,000 ($178,000 if married filing jointly) to a ROTH.  According to 20somethingfinance.com, you can contribute $17,500 for 2013 to a ROTH 401(k) or regular 401(k).  These are the updated amounts for 2013.

So here are a few questions you should ask:

• Does your ROTH 401(k) allow early withdrawls of contributions for a house down payment?
• What is the maximum retirement contribution if you fund a ROTH 401(k)?
• Is there more control and lower fees when using an external ROTH IRA account?
• What will you do with the money long term and matched money when you change jobs?

This post was reposted from http://finlit.biz/retirement-2/4-questions-to-ask-if-you-are-thinking-about-using-a-roth-401k/, originally written on January 31st, 2013.